Micron Technology Climbs Pre-Market On $6.1 Billion U.S. Subsidy Approval: Retail Turns Bullish
The funds will support the construction of three advanced chip fabrication facilities, including the megafab complex in New York, slated to be the largest of its kind in the U.S. once completed.
FollowMicron Technology’s stock climbed as much as 2% pre-market after the U.S. Department of Commerce finalized a more than $6.1 billion subsidy for the memory chip-maker.
The investment, unchanged from the amount initially announced in April, marks one of the largest government awards to chip companies under the U.S. CHIPS and Science Act.
The funds will support the construction of three advanced chip fabrication facilities in New York and Idaho. Micron expects these projects to create at least 20,000 jobs by 2030.
Among these facilities, the megafab complex in Clay, New York, is expected to be the largest chip fabrication facility in the U.S. once completed.
In addition to the $6.1 billion from the CHIPS act, Micron and the Commerce Department have agreed on a preliminary plan for a $275 million investment to expand its facility in Manassas, Virginia.
This site specializes in producing chips for automotive, networking, and industrial markets.
Micron Technology Sentiment and Message Volume on Dec 10 as of 8:20 a.m. ET | Source: Stocktwits
Retail sentiment around the stock jumped to ‘bullish’ from ‘neutral’ a day ago while chatter flipped to ‘high’ from ‘low’.
Users on Stocktwits are hoping the stock will finally rebound.
According to the government, only one of every 50 memory chips is made domestically, all from Micron's facilities.
The planned investments aim to increase this to producing one out of every ten memory chips in the next decade, enhancing national security by ensuring a reliable supply chain for critical technology components.
President Joe Biden's administration has doubled down on fueling domestic semiconductor production, seeking to reduce reliance on China and Taiwan. The U.S. has finalized a series of subsidies, including a $7.86 billion award for Intel and $6.6 billion for Taiwan Semiconductor Manufacturing Co.
The approval comes weeks before President-elect Donald Trump takes office. Trump has been critical of subsidies under the CHIPS Act, but analysts anticipated the Biden administration would finalize funding commitments before leaving office in January.
Micron's stock is up over 24% year-to-date, with the latest subsidy further fueling investor interest.
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